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Big Trades – EUR/USD and GBP/USD 01.18.2016
At the end of last week we made a BIG change to Big Trades. –
Single Entry, 200 pip stop
**76% of our trades last year never triggered the second lot, so we are minimizing risk by focusing only on the first entry opportunities.
One More Enhancement to Big Trades!
Most Big Trades will have Aggressive vs. Conservative Orders – What’s the difference?
1. Aggressive orders will be issued on high confidence trades with upcoming event risk catalyst. These orders will be closer to the market price, increasing our chance of getting into trades/views we like a lot.
2. Conservative orders have entries further away from the market price. These levels are more favorable technically but would only trigger on a stronger retrace that may/may not occur off data.
3. DO NOT place BOTH Aggressive or Conservative orders – pick one based on your risk tolerance.
With that in mind, here are 2 New Orders
Place Order to Sell EUR/USD at 1.0920
Stop at 1.1120
Place Order to Sell EUR/USD at 1.0970
Stop at 1.1170
Place Order to Sell GBP/USD at 1.4300
Stop at 1.4500
Place Order to Sell GBP/USD at 1.4410
Stop at 1.4610
3. Existing USD/JPY Order
*Orders to follow later, we are watching how these trades
Conservative (Existing Orders)
Place Order to Sell USD/JPY at 118.50
Stop at 120.50
3 Currencies are in play this week -- GBP, EUR and CAD. We believe that the Bank of Canada should lower rates but we want to see a deeper retrace in USD/CAD before getting in. We’ll revisit the CAD / BoC trade tomorrow.
In the meantime, UK data has been terrible and we believe that this week’s inflation, employment and retail sales figures will reinforce the market’s concerns about the U.K. economy. CPI is scheduled for release tomorrow and with oil prices falling, inflation is likely to decline. More importantly, BoE Governor Carney will be delivering his first speech of the year on the economy and we believe that it will echo the caution heard from this month’s BoE minutes. Earlier this month, U.K. policy makers expressed concerns about financial market volatility and lower inflation.
As for the EURO, while the ECB is not expected to increase stimulus, the price of Brent has fallen by more than third since the ECB met in early December. This will give Mario Draghi strong reasons to remind investors that it is within the central bank’s mandate to increase QE because the drop in oil has made it more difficult for the central bank to meet its 2% inflation target.